Thinking of using a home equity (bill consolidation) load with Providian to pay off all my credit cards...which is around $20,000. The deal with this company is that the rate is 7.5% plus the prime rate which is around 2.25%...therefore the "floating rate" is currently at 9.75%. That is half of what my current APR is with all of the credit card companies!! However, I am not too familiar on how volatile the prime rate has been over the past several years. To my knowledge with the economy doing so well, the prime rate has been very stable. Have we ever seen the prime rate above 7 or 8% over the past 5 years? Anyone have any good or bad experiences with this type of loan? This loan goes for 15 years and can be paid off at any time without any penalties.

Well, to answer your immediate question, interest rates are at an all-time low. I think it would be ridiculous to get a loan with adjustable interest right now. I believe that if you shop around a little bit, you might be able to get a fixed-rate loan (if you're credit is still good, if not you may be stuck).

As for the question you didn't ask : you first have to ask yourself if you have controlled your spending habits before you get a consolidation loan. Your credit card debt is the symptom, not the problem. The problem is that you have been spending more than you make. Try creating a monthly budget and living on it for three months and seeing how much of the debt you can knock out in that time. If you don't learn to live on less than you make, the consolidation loan won't help and you will run up more debts and now your house will be in trouble (because you've borrowed against it). Go live on a strict budget for three months. If you're doing well after that and you still want to, get the debt consolidated (subject to what I said above) but pay it off AS QUICKLY AS POSSIBLE. Don't let it linger or it will act like an anchor on your finances for life.

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